An extremist, not a fanatic

July 15, 2013

The problem of workshyness

Imagine the following scenario. A man is hopelessly in love with Alison King. Every lonely night he watches repeats of Corrie, pining for his dream woman. A friend then says to him: "why are you wasting you life wanting the impossible? Why not settle for a lesser woman? You'll be happier than you are now."

Most of us would think the friend is giving good advice.

What's true for dating is also true for jobs: Dale Mortensen and Chris Pissarides got a Nobel prize for pointing out that the two markets are very similar. In both cases, we have two sides looking for a good match. If it's rational for someone to settle for less than their (perceived) perfect match in the dating market, it should therefore be reasonable for someone to settle for less than their dream job. And, in fact, millions of us do so. People who can't get hired by Goldman Sachs settle for J.P. Morgan; people who can't get a job at the FT settle for the Telegraph (or I suppose vice versa).

So far, so utterly trivial. But here's the thing. There is, across the western world, an excess supply of labour. Some would-be workers cannot get a match at all. So, if it's rational for everyone else to settle for less than they'd like, shouldn't it also be rational for the least attractive potential workers to settle for not getting a job at all? Just as our friend says: "don't chase Alison King; you're only making yourself miserable wanting what you can't have", shouldn't we also tell the least productive workers: "don't make yourself miserable wanting a job that isn't there"?

However, not only is this advice rarely given, it's rarely taken. Andrew Clark has shown that people typically do not adapt to being unemployed. ONS data corroborate this. They've asked people to rate their life satisfaction on a scale from zero to 10. Amongst those in work, only 20% gave a score of six or less. But 45% of the unemployed did.

In this sense, we do have a problem with workshyness - there's not enough of it.

Why not? One reason, I suspect, is that the unemployed have internalized moral norms about the desirability of work. But this norm, which has long been questioned, is out of date in a world of mass unemployment. It is the kind of morality which brings you down and can never lift you up.

Herein lies a reason why many Marxists have traditionally been hostile to bourgeois morality. First, because it contains big element of hypocrisy: the good advice not to hanker after what you can't have suddenly stops applying to the very low-skilled unemployed. Second, because moralistic attacks on the unemployed for not wanting to work serve an ideological function: they deflect blame for unemployment away from where it should lie - in the inherent failings of capitalism - and shift it onto the victims.

But let's be clear. Anyone who seriously wanted to improve the well-being of the nation would stop prating about "changing the culture" to encourage people to seek work, and do the precise opposite.

I was about to say something similar. When it comes to the immigration debate you seem to have said in the past that the new workers (even if they're low-skilled) can create more jobs than they "take up", whereas with the current, native unemployed you don't seem to make that argument.

@Pablopatito, the lump of labour fallacy is actually a strawman, i.e. a slur invented to undermine those who question the ability of the market to provide full employment.

The premise of the counter to the supposed fallacy is that more people creates more demand which in turn produces more jobs (this is of a piece with theories of structural unemployment and general equilibrium - Say's and Walras's laws).

The "glut of labour" that we face today is less to do with the number of workers and more to do with long-run increases in productivity that have not been offset by reductions in working time. Automation means we need fewer workers, but societal norms mean that those that have jobs tend to "hoard time".

@Metatone, the issue is not about the growth in the global labour force, i.e. the quantum of workers, but the changing composition of capital vs labour in production.

If the global workforce doubled over a year, but there was zero productivity growth, then the increase in production would be matched by an increase in consumption, as every producer is a consumer. Employment would not halve (this is the "lump of labour" counter).

However, if productivity increased 10%, due to capital-labour substitution (i.e. automation), then the workforce could grow at a relatively lower rate, while consumption could be maintained by commodity deflation (i.e. productivity gains can be split across lower costs and lower real prices).

If those productivity gains were remitted in time to workers (i.e. shorter hours, same pay), this would erode profit margins. Consequently, capital prefers to reduce the cost of labour, and therefore its share of the composition of production.

@ Rick Stein's bin, pablopatito.
I was just making the innocuous point (supported by John Aziz) that we now have an excess supply of labour. Quite why this is so is irrelevant to my point.
This is quite separate from the lump of labour claim. That claim is that labour demand is flexible in the face of several shocks. Maybe. But it's not so flexible as to eliminate the excess supply of labour. To see the proof of this, open your eyes.

One way of looking at the lump of labour fallacy is that the amount of employment is proportional to the amount of consumption, so adding people won't affect the unemployment rate, as you're adding consumers at the same rate as workers.

Having established that consumption is proportional to employment, we find that the ratio is determined by productivity - if one person's consumption can be filled by less than one person's labour, then not everyone will be employed - initially, improvements in productivity allow people to retire, children to extend their education and working weeks to drop, but, eventually, you have to either increase consumption (which, you may have noticed, we're not doing because pcGDP isn't growing) or you have to increase unemployment.

The fact is that there aren't enough jobs to go around. Wouldn't society be much healthier if work was a choice? People who don't want to work would stop trying to get jobs, so people who do want to work would face less competition, making it easier to get one.

Where does the rise in voluntary work fit into this? Also what used to be called "home making" - caring for children, sick and elderly parents, etc? Why do more married women work now (at least in the UK) than in the past? Is it because they have to or because they want to? No one in the 1950s called married housewives "work shy".

One further point - Hunter-gatherer societies generally "work" far fewer hours than either agricultural or industrial societies.

Sorry, I'm not making any particular point. I'm not an economist, so it all baffles me.

Pablopatito and Rick both have a point in throwing down the lump of labour gauntlet in front of Chris.

Chris says “shouldn't we also tell the least productive workers: "don't make yourself miserable wanting a job that isn't there"? An answer to that point is that the number of jobs available is related to the number of people actively looking for work, all else equal. E.g. immigrants have arrived in the US at the rate of about a million a year over the last two centuries which means the US has been able to create jobs at the rate of very roughly a million a year.

Same applies to the unemployed in the UK: if X thousand unemployed persons switch from refusing to seriously look for work to actively seeking work, that will enable X thousand jobs to be created.

Re Chris and Aziz’s point that “we now have an excess supply of labour”, that is very vague. One could argue that we’ve always had an excess supply of labour in that there have always been hundreds of thousands unemployed in the UK, if not millions.

@ Ralph. You say "if X thousand unemployed persons switch from refusing to seriously look for work to actively seeking work, that will enable X thousand jobs to be created."
I'm not sure. The immigrants (and farmers and women) who entered the industrial labour force had a marginal product sufficiently high that they were attractive to employers at reasonable wages. I'm not sure the same is true for the most unskilled workers now, who might have a v. low MP indeed (lower than the minimum wage). Evidence for my hypothesis is that very many unemployed are looking for work, and can't get it.
Maybe you're right that there has often been an excess supply of labour. But it's unusually acute now.

I find the norm about the desirability of work per se hard to separate from the norm about the desirability of looking after yourself and not imposing on others more generally.

I'd defend the later - I think taking responsibility for yourself is generally a good thing - but if you hold that norm, I would require some pretty strong mental accounting to separate out paid employment from that

Chris says "I'm not sure the same is true for the most unskilled workers now, who might have a v. low MP"

What exactly is the definition of unskilled? There must be very few unskilled workers who couldn't become skilled given enough time and resources. Skilling (is that a word?) the unemployed is a better policy than accepting a significant proportion of the population will remain unskilled and unemployed, surely?

Also, a weaker welfare state may encourage people to make more of the free education they're provided when they're young?

Chris, If there has been a big fall in demand for unskilled labour, and such labour just can’t be trained up to the standards required by employers, then there are then just two options. One is to create very low output “make work” or Job Guarantee type work for the hords of unskilled folk. The second is to accept that “robots and skilled robot technicians” can produce much of what we need, so a significant proportion of the unskilled might as well be allowed to live a life of leisure. Which is a long winded way of me saying “You’ve got a point”.

However, I doubt there has been a HUGE change in the demand for and supply of unskilled labour since before the crunch. So I’d guess we ought to be able to get back to pre-crunch levels of employment.

As to the very long term, “robots and skilled robot technicians” will be able to produce most of what we need, so as per your suggestion, we’ll continue with a process that has been going on for decades: taking a gradually more relaxed attitude to the unskilled doing nothing.

1) If capitalism is only capable of producing so-many jobs (which are productive enough to be filled), and that is a justification for "bribing" some to not work; then it necessarily follows we should actively try and prevent those jobs from being filled by foreign-labor UNLESS there is absolutely no-one at home capable of doing them. I mean, surely?

2) Is it really fair to say that all (or even a large chunk) of the dis-utility arising from not working is because of social stigma? I mean, that may well be the case for short unemployment spells; but idleness is deeply corrosive, and filling your days with day-time TV can't be happy making for anyone. And, by definition, those unable to find work will be the least likely to be self starters capable of disciplining themselves to make use of their free-time in ways that actually do make them happy. I fear that removing the social opprobrium might actually make the unemployed less happy over time, if it encourages some to drift into idleness and the hellishness that brings..